For the Week of November 23, 2009

KEY CASES

2ndCir: Underwriters were not administrative employees exempt from overtime pay

Underwriters who approved loans in accordance with detailed guidelines provided by their employer were not administrative employees exempt from the overtime requirements of the FLSA, ruled the Second Circuit. In this instance, there was no indication that the underwriters were expected to advise customers as to what loan products best met their needs and abilities. As a consequence, the circuit court determined that the work of an underwriter concerned the "production" of loans, the fundamental service provided by the bank, rather than administrative work. Underwriters were not involved in determining the future strategy or direction of the business, nor did they perform any other function that related to the business's overall efficiency or mode of operation. Rather, they were trained only to apply the credit policy as it was articulated to them through their employer's detailed credit guide. Further, the fact that the bank paid production incentives to underwriters showed that it believed that their work could be quantified in a way that the work of administrative employees could not. Underwriters, like the employee, were workers who produced services that were "sold" by the business to produce its income (Whalen v J.P.Morgan Chase & Co, November 20, 2009).

2ndCir: District court's relevance standard too restrictive in denying enforcement of EEOC subpoena

A federal district court applied too restrictive a standard of relevance in finding that national guidelines on the application of religious exemptions to a company's appearance rules were irrelevant, thereby denying the EEOC's application to enforce a subpoena, ruled the Second Circuit. During an investigation of religious bias charges, the EEOC requested documents and information from the employer related to its appearance guidelines. The district court found that the EEOC's subpoena was overly broad and sought national information not relevant to the individual charges being investigated. Reversing, the circuit court noted that the appearance guidelines applied to all company facilities in the country, as the company would not permit employees who could not meet the guidelines to work in public-contact positions; two employees were told that they could not drive a company truck while wearing a beard and neither employee was told that he could request an exemption from the policy for religious reasons. Further, the EEOC's charges alleged not only a case of failure to accommodate, but a pattern or practice of religious bias in failing to accommodate those who could not meet the appearance guidelines. Moreover, the circuit court rejected the employer's argument that only two charges of discrimination failed to justify a nationwide investigation. Rather, at the investigatory stage, the EEOC is not required to show that there is probable cause to believe that discrimination occurred or to produce evidence to establish a prima facie case of discrimination, concluded the Second Circuit (EEOC v United Parcel Service, Inc, November 19, 2009).

3rdCir: Intervenor lacked standing to seek modification of order restricting access to records searches

The National Right to Work Legal Defense Foundation (NRTW) lacked standing to request modification of a protective order restricting access to records of individuals who were possible employees of an employer targeted for a union organizing campaign, ruled the Third Circuit. As part of its organizing campaign, a union gathered the license plate numbers of vehicles parked in the employer's parking lots. Those numbers were used in a tagging operation of state motor vehicle bureaus to obtain the names and addresses of employees. A class action suit was filed against the union by employees concerning its actions in obtaining their home addresses, and it was determined that the union's actions violated the Driver's Privacy Protection Act (DPPA). Thereafter, the union requested a protective order to safeguard the privacy of the individuals and prevent disclosure of its organizing strategy. The NRTW sought to modify the protective order to allow access to disputed search records, so it could notify non-class members that the union accessed their motor vehicle records. However, the court concluded that disclosure of the search records cannot be allowed because such disclosure would violate the prohibitions established under the DPPA, since the disclosure sought by the NRTW would do nothing more than identify potential litigants (Pichler v UNITE, November 13, 2009).

7thCir: Reduction in benefits for foreign national under pension plan inappropriate

A company retirement plan acted improperly when it advised a foreign national that his benefits under the plan would be calculated as though he had worked his entire career for the US parent company, rather than having spent 17 years with an English affiliate, ruled the Seventh Circuit. On the basis of a plan provision in effect in 1995, the plan administrator decided that the employee was not entitled to benefits under the English affiliate's retirement plan because it was a "qualified defined benefit plan," and thus within an exclusion. That decision reduced the employee's pension entitlement by $4,000 per month. The court observed that at the time the employee began working in the US, the plan restricted "[e]mployees" to citizens or residents of the US, and the employee was not in either category when he was working for the English affiliate. It was not until two years after he relocated to the US that the plan was amended to provide that for individuals employed after April 1, 1997, who were entitled to benefits under a non-US plan, their benefits would be reduced. That amendment did not apply to the employee, however, because a document in his file indicated that an offset for foreign plans was not specifically written into the plan, but was followed as a common practice. Provisions of an ERISA plan must be in writing and cannot be modified by "common practice," concluded the Seventh Circuit (Bandak v Eli Lilly and Co Ret Plan, November 18, 2009).

9thCir: Rehab Act applies to independent contractors

The Rehabilitation Act applies to independent contractors, as well as employees, ruled the Ninth Circuit, in question of first impression. In a case arising from a medical center's failure to accommodate an independent contractor physician, the circuit court focused on whether Section 504 of the Rehab Act incorporates Title I of the ADA literally, and thus would only cover employees, or selectively, which would expand application. The court held that the incorporation was selective. First, the Rehab Act's scope, which encompasses qualified individuals and any operation for which an employer receives federal funds, is broader than the Title I of the ADA, which does not cover relationships beyond the employer-employee relationship. Second, the court ruled that Congress did not use the ADA to limit the Rehab Act's reach, as the former refers not to incorporation, but to standards. Nothing in Section 504 explicitly adopts limiting language and the court found that the incorporation referred to "standards applicable to… discrimination claims" not to who is covered. Finally, the Ninth Circuit held that literal incorporation would result in duplication between the two acts in the definition of certain terms. Such duplication, held the court, would force either the ADA's version to replace the duplicative Rehab Act portion, or would require harmonization. Thus, the Ninth Circuit found that Congress intended to create two parallel schemes, which argued in favor of a finding that the Rehab Act's incorporation of Title I of the ADA was selective (Fleming v Yuma Regional Med Ctr, November 19, 2009).

9thCir: Action of OPM in same-sex benefits case threatens Judiciary Branch’s autonomy

The Office of Personnel Management (OPM) acted improperly when it directed an insurance carrier not to process the benefits application of a female federal judiciary employee because she was married to a woman rather than a man, concluded the Ninth Circuit. In a court order, the Ninth Circuit concluded that denying an employee a benefit based on her sex or sexual orientation violated one of the personnel policies under the Judiciary's Employment Dispute Resolution Plan (EDR). Thus, the court awarded the employee an amount equal to the amount of benefits she would have received had she not been denied coverage for her partner, and also ordered that the employee's wife be enrolled in the same plan an opposite-sex spouse would enjoy. Further, the court observed that since Congress has decided that the Judiciary's EDR tribunals are the only forum where judicial employees may seek redress for unlawful personnel actions, the OPM's actions implicate the autonomy and independence of the Judiciary as a co-equal branch of government. Although OPM administers the Judiciary's employee benefit programs, it could not disregard a coordinate branch's construction of the laws that apply to its employees. History reveals that Congress intended the Judiciary to have the authority to manage its own personnel and adjudicate workplace complaints. Accordingly, the court concluded that an EDR tribunal's reasonable interpretation of a law applied to judicial employees must displace any contrary interpretation by an agency or officer of the Executive (In re Golinski, November 19, 2009).

9thCir: Federal employee unlawfully denied health benefits to same-sex partner

Denial of health benefits to the same-sex partner of a federal public defender violated the Ninth Circuit's Employment Dispute Resolution Plan for Federal Public Defenders (EDR). The employee married his partner at a time when California law permitted individuals of the same sex to marry. After the marriage, the employee requested that his husband be added as a family member beneficiary of his federal benefits. That request was denied on the basis that the provision of benefits to same-sex spouses was prohibited by the federal Defense of Marriage Act (DOMA). DOMA defined marriage to mean only a legal union between one man and one woman as husband and wife, and spouse referred only to a person of the opposite sex. However, the EDR Plan expressly prohibited discrimination on the basis of sex and sexual orientation. Thus, the Ninth Circuit concluded that application of the DOMA to federal benefit laws so as to deny the employee's request for benefits for his same-sex spouse violated the Due Process Clause of the Fifth Amendment. The court concluded that there was no rational basis for the government to provide benefits to opposite-sex spouses while denying those benefits to same-sex spouses. As a consequence, the employee was awarded back pay in an amount equal to the costs of the health care benefits pursuant to the court's order (In re Levenson, November 18, 2009).

10thCir: Wage settlement excluded from coverage of employment practices liability insurance

The terms of an employer's employment practices liability insurance policy did not require an insurance company to cover the costs incurred by the employer in settling a $2.45 million wage and hour class action suit and the related attorney fees, concluded the Tenth Circuit. The class action alleged that the employer unlawfully required hourly employees to work "off the clock" without compensation in violation of the FLSA and state law. When the employer asked the insurer to cover its litigation costs, the insurer denied coverage, asserting that the violations fell outside the policy's terms. After settling the class action suit, the employer sought to recoup its costs from the insurer. However, the circuit court observed that an exclusion in the policy was not ambiguous, such that the only plausible reading was that the insurer was not only not liable for losses on account of violations of the FLSA, but also precluded from coverage for the state and local laws that were similar to the federal statute. Moreover, the court determined that the state law under which the wage and hour violations were alleged was "similar" to the FLSA. Both statutes regulated the compensation relationship between employers and employees, enforced minimum working conditions, and created a system of remedies when an employer failed to comply (Payless Shoesource, Inc v The Travelers Cos, Inc, November 10, 2009).

10thCir: Doctor failed to show speech was factor in adverse employment action

Adverse employment actions taken against a doctor after he advocated that a hospital institute a random drug and alcohol testing program did not constitute a deprivation of his free speech rights, concluded the Tenth Circuit. Shortly after the doctor first raised the issue of a random drug policy, an investigation began concerning interpersonal conflicts between him and another doctor. Since a letter of reprimand was issued to both doctors, the court concluded a reasonable person would not be deterred from speaking since the letter did not discuss his advocacy for random drug testing. Further, the court observed that the doctor failed to establish that his speech was a motivating factor in causing the reprimand. The circuit court observed that the mere temporal proximity of an employee's protected speech to the adverse employment action was insufficient, without more, to establish a retaliatory motive. Additionally, the court concluded that a second investigation of the doctor that resulted in probation and psychiatric treatment recommendations because of disruptive conduct, billing fraud and mistreatment of patients was insufficient to invoke First Amendment protection. An investigation of potential misconduct will generally not constitute an adverse employment action. Further, the doctor failed to establish that a majority of committee members had a retaliatory motive (Couch v Board of Trustees of the Mem'l Hosp of Carbon County, November 17, 2009).

MDFla: Truck driver's state law whistleblower claim proceeds to trial

A truck driver, who alleged he was terminated at the age of 58 due to disability and age bias and in retaliation for his complaints about his employer's safety violations, could only proceed to trial on his state law whistleblower claim, a federal district court in the Middle District of Florida ruled. His disability bias claims under the ADA and the Florida Civil Rights Act (FCRA) were dismissed because he failed to establish his hearing impairment, which was largely corrected by a hearing aid, constituted a disability. Because he failed to exhaust his administrative remedies, his ADEA and FCRA age bias claims were also dismissed. As to retaliation, the court found it did not have jurisdiction over the employee's claim under the Surface Transportation Assistance Act because he failed to pursue the proper administrative scheme required for claims under that statute. However, his claim under the Florida Whistleblower Act (FWA) could go to trial, the court found. The employee testified that he complained repeatedly to management that his employer's practices regarding loading and securing cargo on trucks violated specified state and federal safety laws and such complaints occurred within the month prior to his termination. Moreover, the company's assertion that he violated company policy, via his involvement in a second "preventable" accident within two months, may have been pretextual because the policy allowed for "three opportunities for counseling before termination" and the employer's explanations and evidence regarding the employee's specific prior violations were inconsistent and contained other deficiencies (Hernandez v Mohawk Indus, Inc, November 10, 2009).

MDTenn: No right to jury trial on ERISA and LMRA claims for retiree health benefits

Retirees and beneficiaries of Caterpillar, who sought declaratory and injunctive relief for lifetime no-cost retiree health care benefits, were not entitled to a jury trial for claims under ERISA and the Labor Management Relations Act (LMRA), ruled a federal district court in the Middle District of Tennessee. The court observed that under Sixth Circuit precedent, there is no right to a jury trial in ERISA and LMRA cases involving claims for vested retiree health benefits. Although the employees sought monetary damages for reimbursement of premiums, co-payments and other costs they may have incurred, those claims were intertwined with their primary goal of obtaining a declaration that they were entitled to no-cost lifetime retiree health benefits. Therefore, the fundamental requested relief was equitable, and there is no constitutional right to a trial by jury on claims under the LMRA or ERISA. This case has had a long history in the courts. In May 2007, the district court denied Caterpillar's motion to dismiss the lawsuit. A few months later, the court granted the plaintiffs' motion for class certification. And, in January 2009, the Sixth Circuit ruled that a 1988 labor contract between Caterpillar and the United Auto Workers does not guarantee lifetime retiree healthcare benefits for active workers when they become eligible for pensions before their actual retirement (Winnett v Caterpillar, Inc, November 16, 2009).

NDCal: Court declines to enjoin new hospital policies concerning flu vaccinations

A federal district court in the Northern District of California declined to issue an injunction prohibiting certain California hospitals from implementing a policy that required nurses and other health care workers who declined to be vaccinated against the flu to wear masks and ID badges indicating that they have not been vaccinated. The union sought an order requiring the hospitals to maintain the status quo and exhaust dispute resolution procedures prior to implementing the new policy. The court noted that while the union's claims were not insubstantial, the policy that the hospitals sought to implement directly implicated public health and was supported by infection control experts at the hospitals. Thus, the goal of the policy was to protect patients from exposure to illnesses to which they may be more susceptible than non-patients. Consequently, the court concluded that as long as the dispute resolution procedures in a collective bargaining agreement were implemented on an expedited basis, the equities appeared to weigh against injunctive relief. However, the court charged the parties to implement the new policy in a manner that served management's legitimate interest in identifying employees who have not been vaccinated but at the same time did not call undue and inappropriate attention to an individual employee's status (Service Employees Int'l Union, Local 121RN v Los Robles Reg'l Med Ctr, November 17, 2009).

SDOhio: 74 year-old employee may proceed to trial on ADEA, state law age bias claims

An employee, who was discharged at the age of 74 after 12 years of working at a retail store, was entitled to a jury trial on her ADEA and Ohio state law age bias claims, a federal district court in the Southern District of Ohio ruled. The employee was purportedly fired for a history of performance issues that culminated in her failure to follow a sales procedure that resulted in a $200 loss to the employer. However, she presented evidence that similarly situated younger employees made mistakes resulting in similar amounts of losses to the company, but were counseled rather than terminated. Factual issues also existed as to whether she actually failed to follow the procedure at issue. As to her employment history, she countered the employer's assertions with her long history of good performance reviews. She also presented evidence to show that her supervisor at the time of her termination, a 23 year-old, harbored age-based animus and that this animus was reflected in the performance evaluations that "clearly affected the ultimate decision-maker" in the employee's termination. Finally, the court noted that a jury could view the firing of a 12-year employee over a $200 mistake as "an overblown reaction when there were alternative remedies available." (Winkelmann v Big Lots Stores, Inc, November 10, 2009).

STATE LAW CASES

CA: Attorney must pursue class action until all class issues resolved

An attorney representing employees in a class action seeking to recover deductions from wages, failure to pay overtime and failure to provide meal and rest breaks, had not exhausted his responsibilities to the class at the time he filed a motion for attorney fees, ruled a California court of appeal. After the attorney obtained a default judgment against an employer, he discovered that the employer had ceased operations, sold its assets to a third party and intended to file for bankruptcy. The attorney asserted that his job would be completed once his motion for attorney fees was heard, and that he had no obligation to enforce the judgment on behalf of the class. However, the appellate court observed that in class actions, where there is no agreement with absent class members to define the scope of the engagement, class counsel must represent all of the absent class members' interests throughout the litigation. Since it was unlikely that there were sufficient assets to pay each class member what is owed, plus attorney fees, there remained an important class issue. If the class counsel was not competent to enforce the judgment without assistance, there was nothing to prevent him from associating with expert counsel. If the class counsel determines that there are no recoverable assets, then the trial court can determine whether counsel should be relieved of any further obligations as to the class, concluded the appellate court (Barboza v West Coast Digital GSM, Inc, November 19, 2009).

FL: Non-compete provisions survived expiration of contract

Non-compete provisions in an employment agreement survived the expiration of the contract so that an employer's petition for a temporary injunction to enforce the non-compete clause should have been granted, concluded a Florida appeals court. Following the merger of two investment firms, the employee entered a four-year agreement to serve as chief executive. After expiration of the contract, he continued to serve as chief executive for two more years, but without a written contract. Subsequently, the employee resigned from the company and began soliciting former clients for his new employer. In the appeals court's view, the terms of the employment agreement included rights and obligations that survived the four-year term. The parties expressly contemplated the duration of the restriction period in the event the employee remained employed for the entire four-year term. Under the plain meaning of the non-compete agreement, if the employee worked the full term of the contract, his post-term resignation or termination would trigger a 24-month non-competition period, concluded the court. Thus, because the restriction period commenced upon the employee's resignation, the non-compete covenants survived the term of the employment agreement (St Johns Investment Mgmt Co v Albaneze, November 13, 2008).

KY: Police officer with MS failed to prove disability bias

A Kentucky police officer, who had been diagnosed with multiple sclerosis, failed to prove that a detective job description was purposely drafted in a way to prevent him from meeting the requirements of the job or to force him out of the department, a Kentucky appellate court ruled. Also rejected were his claims of retaliation, constructive discharge, intentional infliction of emotional distress and disability harassment. Although the officer provided evidence that the chief's removal of him from his shift as a detective had a significant impact on his abilities, the burden-shifting analysis led the court to reject the retaliation claim because the chief contended that a doctor's note stating that the officer "was not able to do the duties of a police officer of detective" was the basis for his decision to remove him for the safety of both himself and his coworkers. Further, the officer failed to prove that, while he endured offensive jokes about his condition, they did not constitute severe and pervasive harassment under the prevailing standard; in fact, they stopped when the officer told the chief he was offended. Moreover, other examples of harassment, including claims that the job description was drafted in such a way to specifically keep him from being able to meet the requirements, were not supported by the record, the court concluded (Bohl v City of Cold Spring, November 13, 2009).

NY: Main organizer of coworker "hate club" properly discharged

When work turns into the movie "Mean Girls" it is never a good thing. A New York appeals court upheld the discharge of an 11-year female employee who was the central player in creating an at-work "hate club" against a female coworker. Affirming a hearing officer's findings, the appeals court concluded that the officer had the discretion to discharge the county employee pursuant to New York's Civil Service Law for creating a "hostile, intimidating, disruptive [and] uncomfortable" work environment. Beside the "loud verbal exchange" between the employee and the coworker, the employee admitted that she helped form, with other employees, the "I Hate Teena Club," referring to the coworker. She wore a ribbon demonstrating membership in the club and attempted to recruit others to join. The employee also kept a calendar of the coworker's arrivals and departures from work and solicited assistance in monitoring her activities. She also threatened other employees who informed her employer on the existence of the club. While the employee asserted that the penalty of termination was excessive, and that no other club members were discharged, the appeals court upheld her discharge, finding that it was supported by the evidence: the employee was "the only employee who made threats to the person or property of others," was the "main player in the hate club" and "had not expressed any remorse regarding her conduct." (Sidoni v County of Tioga, November 12, 2009).

NE: Employee who contracted West Nile Virus can proceed against employer for negligence

A railroad employee, who had brought a claim of negligence under the Federal Employers' Liability Act after contracting West Nile Virus (WNV) while in the "course and scope of her employment," produced enough evidence potentially showing that the negligence of her employer, Union Pacific Railroad, may have aided in her contracting the virus, held a divided Nebraska court of appeals, reinstating her case. The employee claimed that she was bitten by mosquitoes while working, and that her employer knew there was a potential mosquito problem. Within a week of getting bitten she was diagnosed with WNV. The district court granted Union Pacific's summary judgment request, finding no specific information to lead to a conclusion that it had knowledge of large concentrations of mosquitoes, or that the harm was reasonably foreseeable or preventable. Reversing, the appellate court found that there was certainly some evidence that Union Pacific breached its duty to provide a reasonably safe place to work, as it knew of the dangers associated with WNV, and even had an employee drop larvicide pellets into standing water. What does a case like this mean for the 2009 H1N1 influenza virus? (Deviney v Union Pacific RR Co, November 17, 2009).

OR: Non-compete agreements enforced against employee under Oregon law

A federal district court in Oregon granted an employer's motion for preliminary injunction in a case seeking to enforce a non-compete clause. The employee signed two non-compete agreements; the first followed his transfer to a sales team and the second, which was less restrictive, followed the complete purchase, by the employer, of all his then-employer's stock. The employee asked for a declaration that the agreements were unenforceable, and the court analyzed the relevant Oregon law, which stated a general opposition to non-compete clauses, except in cases where the agreement began with either the employee's initial employment, or with their advancement. Although the second agreement did not create initial employment, the court held that under the policy underlying the law, the agreement was enforceable, and the employer would likely succeed on its breach of contract claim. The legislature's intent was that non-compete agreements that do not create surprise or extra burdens should be allowed. Further, the law aimed to prevent coercion, which was absent in the instant case. The employee had knowingly entered into the first agreement, which was merged into the second, less-onerous agreement. Thus, the second agreement was "devoid of the coercion… and did not 'surprise' [the employee] by increasing the burdens on his employment." Therefore, the court ruled that the employer had a likelihood of success of proving that the employee breached his contract when he accepted a position with a competitor (Epiq Class Action v Prutsman, November 13, 2009).

OR: Teacher's challenge of district's handgun policy dismissed

A trial court did not err when it dismissed a teacher's challenge of the lawfulness of a school district policy that prohibits employees from carrying handguns to school, an Oregon appeals court held. The teacher, who is licensed to carry a handgun and wished to carry it with her at all times due to fear of a violent confrontation with her former husband, asserted that the school's policy violated a statute, ORS 166.170, which she claimed legislatively preempted the school district from regulating firearms in any manner. She argued that the policy violated both ORS 166.170(1) and ORS 166.170(2); according to the school district, because the teacher cited only ORS 166.170(2) in her complaint, the court should limit its review of the validity of its policy to whether the policy violated that subsection only. Subsection (1) relates to regulatory authority, while subsection (2) voids ordinances that are contrary to the subsection. Noting that there is nothing in the legislative history suggesting that the legislature intended the scope of its declaration of preemption in ORS 166.170(1) to reach more broadly to such things as internal employment policies and management directives, the court remanded for entry of a judgment declaring that the policy was not preempted by Oregon law (Doe v Medford Sch Dist, November 18, 2009).

TN: Firefighter physical agility exam had no disparate impact against females

The city of Lexington, Tennessee's physical agility exam for firefighter positions did not have a disparate impact on females, held the Tennessee court of appeals. All applicants for vacant entry-level firefighter positions were required to complete the exam, which consisted of eight different events, in less than fourteen minutes. In 2005, the plaintiff was the only female applicant to apply for the position and one of two applicants who did not pass the exam. She filed suit under the Tennessee Human Rights Act, challenging a portion of the exam requiring candidates to place a 24-foot ladder back onto the fire engine. The applicant asserted that the city's refusal to adopt an available alternative employment practice when it required candidates to lift the ladder from the center, and not one end at a time, had a disparate impact on females. The end-on-end method takes "only seconds longer" and "would accomplish the same purpose," according to the applicant. In fact, she used that method and passed the exam in 2007. However, the record revealed that the applicant could have used the end-to-end method in 2005 when taking the exam; the written instructions did not specify how the ladder should be replaced. Because the applicant conceded that such a method did not discriminate against women, the appeals court held that the physical agility exam did not cause a disparate impact on the basis of sex (Hayes v City of Lexington, November 12, 2009).

AGENCY DEVELOPMENTS

EEOC now enforcing GINA

The EEOC has reminded stakeholders that it is now enforcing Title II of the Genetic Information Nondiscrimination Act, which prohibits genetic information discrimination in employment. The law took effect November 21. On March 2, the agency issued proposed regulations implementing GINA's employment provisions and received over 40 public comments in response. The final regulations implementing Title II are currently under Office of Management and Budget review and will be issued as soon as the review process is concluded. For more information on GINA, check out Pam Wolf's blog on the subject at CCH WorkDay.

EEOC obtained $294 million in private sector relief in FY 2009

The EEOC obtained unprecedented relief through its private sector administrative enforcement activities in fiscal year (FY) 2009, securing more than $294.1 million in monetary benefits, according to the agency's annual Performance and Accountability Report. Private sector charge receipts also reached near record-breaking numbers. At the end of FY 2009, charge inventory increased by 11,817 charges to 85,768 – a 15.9-percent increase over the number of charges pending at the end of FY 2008. The agency's systemic program continued to be a chief priority, with 19 new systemic cases filed in FY 2009.

Drilling company must comply with EEOC subpoena, disclose databases on workforce

Pursuant to court order, Patterson UTI Drilling must disclose to the EEOC the structure and contents of any of the company's electronic databases pertaining to its current and former employees, the agency advised. The company must also disclose information about each of the company's employees and any records pertaining to complaints of employment discrimination for a two-year period. The court order stems from an individual EEOC charge that alleged racial harassment and retaliation at one of Patterson's rigs.

DOD adopts interim rule providing whistleblower protections for contractors

The Department of Defense has adopted without change an interim rule providing whistleblower protections for DOD contractor employees who disclose information to government officials concerning waste or mismanagement, danger to public health or safety or violations of the law related to a DOD contract, according to a notice published in the November 19 Federal Register.

DHS to audit 1,000 new workplaces, announces "I E-Verify" campaign

On November 19, Immigration and Customs Enforcement announced the issuance of Notices of Inspection (NOIs) to 1,000 employers across the country associated with critical infrastructure, alerting business owners that ICE will audit their hiring records to determine compliance with employment eligibility verification laws. ICE also released statistics from the 654 audits announced in July. That same day Secretary of Homeland Security Janet Napolitano announced a new program called the "I E-Verify" campaign, which recognizes the approximately 170,000 businesses using the federal government's E-Verify program. DHS will give an "I E-Verify" approval seal to businesses that use "E-Verify in its hiring practices to achieve a lawful workforce." The seal will let the public know which businesses are participating in the program.

For additional information on staying in compliance with federal immigration laws, see Aspen Publishers' new Immigration Law in the Workplace. For more information, call 1-800-638-8437 or visit http://www.aspenpublishers.com.

EBSA first postpones, then withdraws 401(k) investment advice rule

The Employee Benefits Security Administration (EBSA) published a notice in the November 20 Federal Register withdrawing its final rule under ERISA and parallel provisions of the Internal Revenue Code relating to providing investment advice to participants and beneficiaries in individual account plans such as 401(k) plans and individual retirement accounts. The notice withdraws the January 21 final rule implementing a statutory prohibited transaction exemption under the Pension Protection Act and providing an additional administrative class exemption. EBSA decided to withdraw the rule based on public comments that raised sufficient doubts as to whether the conditions of the final rule and the class exemption associated with the rule could adequately protect the interests of plan participants and beneficiaries. The agency had recently extended the applicability and effective dates of the final rule until May 17, 2010. EBSA intends to soon propose a revised rule limited to the application of the statutory exemption relating to investment advice.

Fourth Circuit rules in favor of two-member NLRB

Weighing in on a matter pending before the US Supreme Court, the Fourth Circuit joined the First, Second and Seventh Circuits in holding that the agency has the statutory authority to hear cases and issue orders regarding unfair labor practice charges under a two-member board. The Board has operated with only two members for nearly two years, issuing decisions in more than 500 cases. While many of those decisions have been accepted by the parties, at least 77 have been challenged on the two-member question, and are awaiting resolution in the courts. On November 2, the Supreme Court granted cert in New Process Steel v NLRB (Dkt No 08-1457), agreeing to settle the matter of the two-member Board's authority. Meanwhile, three NLRB nominees (Brian E. Hayes, Mark G. Pearce and Craig Becker) are awaiting confirmation by the full Senate. The case, Narricot Indus LP v NLRB, involved a seatbelt manufacturer with factories in Virginia and North Carolina, where the United Brotherhood of Carpenters and Joiners of America represented about 300 employees. The NLRB ruled, and the Fourth Circuit agreed, that Narricot improperly withdrew recognition from the union in October 2007 after company officials aided an effort by some workers to oust the union. The Board ordered Narricot to return to bargaining with the union, and the Fourth Circuit upheld that order.

Michigan beer distributors pay out $41 million in back pay for bad-faith bargaining

Bad faith bargaining by five Southeastern Michigan beer distributors with the International Brotherhood of Teamsters on behalf of about 2,000 employees resulted in a total back pay award of $41 million for the employees, one of the largest payouts on record for the NLRB, announced the agency November 17.

OSHA provides crowd-control guidelines for protecting workers during retail sales events

OSHA has prepared a fact sheet providing crowd-control guidelines for retailers to protect workers during major sales events, the agency announced November 17. The fact sheet provides employers with recommended elements for crowd control plans. Plans should include the following: having trained security personnel or police officers on site, setting up barricades or rope lines for pedestrians and crowd control well in advance of customers arriving at the store, making sure that barricades are set up so that the customers' line does not start right at the entrance of the store, preparing an emergency plan that addresses potential dangers and having security personnel or customer service representatives explain approach and entrance procedures to the arriving public. OSHA also recommends not allowing additional customers to enter the store when it reaches its maximum occupancy level and not blocking or locking exit doors. Last year, an employee was trampled to death at a Long Island, New York Wal-Mart while a crowd of shoppers rushed through the doors of the store to take advantage of an after-Thanksgiving Day "Black Friday" sales event. According to OSHA, the store was not using the kind of crowd control measures recommended in the agency's fact sheet.

OSHA issues compliance directive to address flu prevention for health care workers

OSHA has issued a compliance directive to health care employers to ensure uniform procedures when conducting inspections to identify and minimize or eliminate high to very high risk occupational exposures to the 2009 H1N1 influenza virus. The directive closely follows the Centers for Disease Control's guidance. OSHA inspectors recommend that health care employers implement a hierarchy of controls, and encourage vaccination and other work practices recommended by the CDC. Where respirators are required to be used, the OSHA Respiratory Protection standard must be followed, including worker training and fit testing. The directive also applies to institutional settings where some workers may have similar exposures, such as schools and correctional facilities. Where respirators are not commercially available, an employer will be considered to be in compliance if the employer can show that a good-faith effort has been made to acquire respirators.

PBGC announces final regs on USERRA benefits

The Pension Benefit Guaranty Corporation published a final rule in the November 17 Federal Register amending the agency's benefit payments regulation to implement provisions of the Uniformed Services Employment and Reemployment Rights Act. USERRA provides that an individual who leaves a job to serve in the uniformed services is generally entitled to reemployment by the previous employer and, upon reemployment, to receive credit for benefits, including employee pension plan benefits, which would have accrued but for the employee's absence due to the military service. The final rule provides that so long as a servicemember is reemployed within the time limits set by USERRA, even if the reemployment occurs after the plan's termination date, PBGC will treat the servicemember as having satisfied the reemployment condition as of the termination date. This will ensure that the pension benefits of reemployed servicemembers, like those of other employees, will generally be guaranteed for periods up to the plan's termination date. The final rule, which takes effect on December 17, only applies to reemployments under USERRA initiated on or after December 12, 1994. Once the final rule is effective, PBGC will begin adjusting final benefit determinations of affected participants and make back payments with interest.

Arizona's Maricopa county files first employer sanctions case

Maricopa County Attorney Andrew Thomas announced November 18 that his office filed the state of Arizona's first employer sanctions case, a civil complaint, against an employer accused of violating the Legal Arizona Workers Act. The civil action alleges the Scottsdale Art Factory's manager, Michelle Hardas, allegedly hired undocumented workers deliberately by using a "subcontractor," which was in reality an employee who was not authorized to work in the United States. The Legal Arizona Workers Act suspends and revokes business licenses of employers that intentionally or knowingly employ undocumented workers in the United States. Pursuant to the Act, Arizona employers must also check the legal status of their new hires using the E-Verify program. On November 2, the US Supreme Court asked Solicitor General Elena Kagan for her views on whether the Legal Arizona Workers Act is preempted by federal law.

LEGISLATION

Second H1N1 emergency sick bill introduced in the House and Senate

On November 17, Senator Chris Dodd (D-Conn) and Rep. Rosa DeLauro (D-Conn) introduced the Pandemic Protection for Workers, Families and Businesses Act (S. 2790/H.R. 4092), emergency, temporary legislation that would give employees up to seven paid sick days to use for leave due to their own flu-like symptoms, medical diagnosis or preventive care, to care for a sick child or to care for a child whose school or child care facility has been closed due to the spread of flu. Part-time employees would also be entitled to the leave on a pro-rated basis. Two weeks earlier, Rep, George Miller (D-Cal), chairman of the House Education and Labor Committee, and Rep. Lynn Woolsey (D-Cal), chair of the Workforce Protections Subcommittee, introduced their own H1N1 emergency temporary legislation. Their bill provides less leave to employees, guaranteeing a maximum of five paid sick days for employees directed or advised to stay home by their employer because the employer believes they have symptoms of a contagious illness, or have been in close contact with an individual who has symptoms of a contagious illness, such as the H1N1 flu virus. This means that employers dictate the leave entitlement. The legislation, called the Emergency Influenza Containment Act (H.R.3991), would cover both full-time and part-time workers (on a pro-rated basis) in businesses with 15 or more employees.

House committee passes Domestic Partnership Benefits and Obligations Act

On November 18, the House Oversight and Government Reform Committee voted 23-12 to approve the Domestic Partnership Benefits and Obligations Act (H.R. 2517), legislation that would makes available certain employment benefits, including health care, to the same-sex domestic partners of federal employees. In order to receive these benefits, the legislation requires an employee with a same-sex domestic partner to certify in an affidavit that his or her relationship satisfies the criteria set out in the Act for establishing a domestic partnership. Once a domestic partnership is established, the employee and the domestic partner are eligible to receive the benefits. The employee and his or her partner are also subject to the same ethical, financial disclosure and conflict of interest obligations that apply to a married federal employee and his or her spouse. The legislation is now set to move to the House floor for debate.

National Right-to-Work Act reintroduced in the House

On November 18, Rep. Steve King reintroduced the National Right-to-Work Act (H.R. 4107), legislation that would amend the National Labor Relations Act and Railway Labor Act to repeal provisions in those Acts permitting employers, pursuant to a collective bargaining agreement (union security agreement), to require employees to join a union or pay union dues or fees as a condition of employment (including provisions permitting railroad carriers to require, pursuant to such an agreement, payroll deduction of union dues or fees as a condition of employment). The bill has been referred to the House Committee on Education and Labor.

TWITTER UPDATES

TOWN HALL MEETING

Disability rights advocates support ADAAA, employer groups question possible overreach

Testimony from disability rights advocates who applauded a renewed focus on ADA compliance with less emphasis on discovery, expensive medical expertise and "mini-trials" highlighted the third of four joint EEOC-Department of Justice town hall sessions on proposed ADA Amendments Act (ADAAA) regulations, held November 17 in Chicago, Illinois. Some representatives from employer groups, however, asserted that the amendment's "per se" list of disabilities was an overreach of the agency's rulemaking authority, while another expressed a desire for a more balanced approach that would require full compliance from employees as well as employers.

PRACTICE NEWS

Time changes coming to the Federal Rules December 1

When is 10 days really 14 days? For the federal courts, when weekends or a holiday intervenes. And are business days and court days the same thing? Sometimes. And yes, that is confusing for litigants, lawyers, court staff and even judges. But starting December 1, the confusion will clear, because the way in which time is calculated by federal courts is scheduled to change, according to The Third Branch, the Newsletter of the Federal Courts. Both the Supreme Court and Congress have approved amendments to Appellate Rule 26, Bankruptcy Rule 9006, Civil Rule 6 and Criminal Rule 45, which simplify the method of computing time deadlines to count every day, including intermediate Saturdays, Sundays and legal holidays for all time periods.

Law departments take action on cost control, according to survey

Law departments are implementing a wide range of cost management strategies as a way to cope and thrive in today’s economic environment, according to consulting firm Hildebrandt’s 2009 Law Department Survey. Cost control measures cited in the survey encompass inside legal spending, legal staffing, outside counsel management and technology.

HEALTH CARE REFORM

Senate unveils health care reform bill…

Senate Majority Leader Harry Reid (D-Nev) and other democrats unveiled the Senate's health care reform package November 19. Called the Patient Protection and Affordable Care Act (amendment in the nature of a substitute to the unrelated Service Members Home Ownership Tax Act (HR 3590)), the estimated gross total of the bill itself is $848 billion over ten years, according to the Congressional Budget Office (CBO); those costs are partly offset by $149 billion in revenues from the excise tax on high-premium insurance plans and $100 billion in net savings from other sources. In total, the CBO estimates that the legislation would increase outlays by $356 billion and increase revenues by $486 billion between 2010 and 2019.

…and votes to move it to the floor for debate

On November 21, the Senate approved by a 60-39 margin a procedural motion to take up its health care reform package. The full Senate returns from Thanksgiving recess November 30 and lawmakers are expected to engage in a lengthy debate stretching into late December.

Minimal employer penalties for not offering health coverage in Senate bill…

Firms with more than 50 workers that did not offer coverage would have to pay a penalty of $750 for each full-time worker if any of their workers obtained subsidized coverage through the insurance exchange, under the Senate's health reform bill.

…while revenue provisions in the bill impact employer plans

In addition to the employer-related provisions in the Senate's health reform bill, the bill also includes a number of revenue provisions that will affect employers and employees in group benefit plans.

State health care reform update

Over the past few months, state action on health reform has slowed due to interest on the national health reform debate. While most states are waiting to act on health reform until after a national plan is voted on, the National Conference of State Legislators has found that members of at least 11 state legislatures are using the legislative process to seek to limit, alter or oppose selected federal action, including single-payer provisions and mandates that would require the purchase of insurance.

REPORTS

OSHA audits of employers' workplace injury and illness data not adequate

A Government Accountability Office (GAO) report has revealed inadequacies in OSHA's audit process. OSHA annually audits a representative sample of about 250 of the approximately 130,000 worksites it surveys to verify the accuracy of its data on injuries and illnesses recorded by employers, according to the report. However, OSHA overlooks information from workers about injuries and illnesses—the only source of data not provided by employers— because it does not routinely interview them as part of its records audits. In addition, employers are underreporting injuries or illnesses because they are afraid of increasing their workers' compensation costs or jeopardizing their chances of winning contract bids for new work. Finding the problems in the report "alarming," Secretary of Labor Hilda Solis said "OSHA will be taking strong enforcement action where we find underreporting."

Report analyzes US employers paid leave benefits provided to employees

In addition to their jobs, workers have obligations—civic, familial and personal—to fulfill, which sometimes require them to be absent from the workplace. The US government generally has allowed individual employers to decide whether to accommodate the nonwork activities of employees by granting them leave, with or without pay, rather than firing them. A Congressional Research Service report examines the incidence of different types of paid leave US employers voluntarily provide as part of an employee's total compensation. Particular attention is focused on paid sick leave.

Study finds family-friendly workplace policies and protections support jobs

The US falls far behind other economically successful nations in terms of adopting policies that support workers and families, according to a study by researchers at Harvard and McGill Universities. The study finds that 14 of the world's 15 most competitive countries provide paid sick leave, 13 guarantee paid leave for new mothers, 12 provide paid leave for new fathers, 11 provide paid leave to care for children's health needs, eight provide paid leave to care for adult family members and seven guarantee breastfeeding breaks to nursing mothers on the job. At the federal level, the United States offers its workers none of those supports.

IN OTHER NEWS

More US job hunters are looking for work outside the country

Here's one way to deal with the brutal US job market: Leave the country. With the nation's unemployment rate at a 26-year-high of 10.2%, more Americans are hunting for, and landing, work overseas, according to staffing companies and executive search firms, reports USA Today.

Unions and nonprofits press for immediate action on unemployment

In a recent forum at the Economic Policy Institute, leaders from the AFL-CIO and nonprofit groups, including the NAACP, the National Council of La Raza and Center for Community Change, convened to sound the alarm about the long-term risks posed by persistently high unemployment. To combat this problem, the groups urged immediate action in the form of a jobs plan, laying out five critical points: (1) provide relief through continued unemployment benefits and COBRA; (2) extend substantial fiscal relief to state and local governments; (3) fund jobs in local communities; (4) rebuild America’s schools, roads and energy systems; and (5) provide tax credits to small and medium-sized businesses. Meanwhile, the Obama Administration will hold its Forum on Jobs and Economic Growth December 3 at the White House.

Employers are left confused by medical marijuana laws

Employers are unsure about how far they have to go to accommodate medical marijuana users, reports the National Law Journal (via Law.com). Many question whether they're even required to tolerate medical marijuana use, which is now legal in 13 states. Employment lawyers say: It depends. Adding to employers' concerns is the US Department of Justice's announcement last month that it would no longer prosecute medical marijuana users, which leaves such matters in the hands of state and local governments.

Will we ever know if the sexual emails factored in the verdict?

A recent jury verdict squarely in favor of the employer in a sex harassment and reprisal case left no real answers as to whether the jury was swayed by some of the more controversial evidence in the case – a cache of sexually explicit, humorous emails found on the female plaintiff's workplace computer – or if it was simply unimpressed with the evidence the plaintiff mustered to back up her claims, reported the Legal Intelligencer (via Law.com). The October 26 issue of CCH WorkWeek summarized the decision, which held that the emails were admissible, despite rape shield rule, because they did not bear on the plaintiff’s own sexual history or personal sexual conduct.

Companies are facing a tougher time monitoring employees' email

Big Brother is watching. That is the message corporations routinely send their employees about using email. But recent cases have shown that employees sometimes have more privacy rights than they might expect when it comes to the corporate email server, reports the Wall Street Journal. Legal experts say that courts in some instances are showing more consideration for employees who feel their employer has violated their privacy electronically.

Investigating textual harassment poses many difficulties

Harassment by text message – or "textual harassment" – is becoming more prevalent, reports the Texas Lawyer (via Law.com). Forty-six states have laws expressly criminalizing electronic forms of harassment, including text messages. Besides the obvious duties involved when investigating a claim of textual harassment, in-house counsel need to be aware of hidden dangers in trying to retrieve text messages or other electronic information as part of an investigation.

BJ's Wholesale Club agrees to $9.3 settlement of overtime pay class action

BJ's Wholesale Club will pay $9.3 million to settle an overtime pay class action lawsuit resolving claims alleging that the wholesaler misclassified certain mid-manager employees as exempt from receiving overtime for hours worked in excess of 40 hours per week in violation of federal and state wage and hour laws. The plaintiff's counsel Klafter Olsen & Lesser LLP announced the settlement, which still needs court approval.

ATR and AWF call for investigation of SEIU President Andy Stern

Two advocacy groups, the Americans for Tax Reform and the Alliance for Worker Freedom, have formally requested the acting United States Attorney for the District of Columbia to launch an investigation into the "potentially illegal lobbying activities" of frequent White House visitor, Service Employee International Union President Andy Stern.

Campus labor rights watchdog fight ends in victory

A national student campaign, led by United Students Against Sweatshops (USAS), persuaded Russell Athletics to reopen a plant it owned in Honduras and rehire 1,200 workers who lost their jobs in January after the company closed the plant soon after its workers had unionized, announced USAS.

Agriprocessors CEO won't face immigration charges

Federal prosecutors have dropped all 72 immigration charges against Sholom Rubashkin, sparing the already-convicted former Agriprocessors CEO a second criminal trial, reports the Des Moines Register. Assistant US Attorney Peter Deegan Jr. said in court papers filed November 19 that even if Rubashkin were convicted of the 72 counts of alleged immigration violations, it would have no impact on his eventual sentence because of his prior convictions. He is awaiting sentencing, expected early next year, after being convicted on all but five of 91 business fraud charges listed in a 163-count indictment. The total maximum sentence for his convictions adds up to 1,255 years, although his actual sentence would likely be far less under federal guidelines.

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Editor

Brett A. Gorovsky, JD

About CCH WorkWeek

This weekly newsletter provides corporate counsel and law firm practitioners with need-to-know employment and labor law information in a timely, yet manageable manner. Benefit from news and information in a broader context, with deeper analysis of recent developments and corresponding trends. Delivered to you every Monday, CCH WorkWeek offers timely coverage of breaking legislative developments, regulatory activity, state law changes, key case law and expert commentary by CCH editors.